Been going on, lack of Consumer Spending and Consumer Confidence through most of last year though it did pick up in the end. Also have chipotle mexican coming out with, in a moment and zynga as well, technology. Do you like tech here . Yeah, although i think whats happening, youre seeing a shift to more risk large cap to small cap, growth to value. I think thats the trend. All right. Thank you both. Good to see you. As you can see executives from the brand name, makers of the baking soda arm a. M. Hammer ringing the closing bell. Stay tuned for disney earnings. And it is 4 00 on wall street. Do you know where your money is . Hi, everybody of welcome back to the closing bell. Im Maria Bartiromo on the floor of the new york stock exchange. This market rallying back after mondays selloff but the Dow Jones Industrial average unable to close above the 14,000 mark. A rally on the street of 98 point, set lipping at 13,978. Up threequarters of 1 . Nasdaq higher, up 1. 25 , technology, one of the Leadership Groups on the upside. 3171 and the s p 500 up 15 points, better than 1 to 1511. Three straight tripledigit moves for the dow strilz, up, down and up today. We bring in ed batowski along with david sauerby and Michael Santolli and also john spalanzani. Thanks so much for joining you go. Hi, maria. Thank you. What do we see about the volatility . Are these moves scaring you and think were headed for a correction given all the tripledigit moves . Theres the old line on wall street you pay a dear price for consensus and everyone in the world is just plowing money into stocks. Thats what scares me, but the valuations, maria, do not scare me. I actually think we have a lot more upside in this market. A little correction, maybe. A lot more upside over the next three to five months. Okay. A lot more upside because you think this market continues moving higher. David, do you believe that . Do you agree . I think youve seen the market up 60 of the time this year. Thats pretty close to what we saw early last year when the market was going up about 66 of the trading days in the beginning of tlooent and if you look over the next two years its an environment where its very beneficial to stocks, low Interest Rates, valuation, and well see this year about a 12 growth in dividends and thats going to be another important catalyst like it was last year to stock returns. Okay. So, in other words, do you think were going to see a correction before we continue higher, or are you worried that in fact were on shaky ground because of valuations . Maria, im im a bit worried because the last couple of weeks bullish sentiment by individual investors is now at about 50 . Thats usually associated with a hiccup in the market. Mmhmm. Last year we had two 2 connections and were up 16 to 20 in stocks. Get ready for the same this year, but from point to point it will be a productive year for stock investors again because of all this monetary stimulation and stock valuation. John, youre sitting there on the trading desk and seeing the flow. What is the flow right now . Do you think this market wants to continue going higher . Yeah. We continue to see the market see good flows, both Short Covering in certain stocks, hedge funds continuing to target those stocks with high Short Interest so thats been a positive. Saw last night the global pmi has ticked up once again. Look at the pmi in the bric countries, all over 50 . India made a new oneyear high even though they are starting to ease Interest Rates over there so thats a positive. Vietnam, which hit a low in july of about 43 in terms of their pni is back over 50 so those another positive. We think the selloff in europe yesterday was more a condition of the short sale, ban being lifted in spain and a little bit more noise, but if we look at city surprise index in terms of european surprises, its off the charts. Its printed to 70, so all in all we think that the Global Markets are healing and china is Getting Better and europe is Getting Better and greece is off the table and draghi will speak this week. Right. Things continue to be positive. Mike im not sure china is Getting Better. You dont think china is Getting Better. Just look at yum earnings. According to bmi china is Getting Better. Expectations are too high. Just for what its worth in china. All right. Lets how about europe . Mike, does europe become front page news again . Where are these markets . A couple of cat lifts on the horizon, italian elections and debt coming due for spain . What we saw yesterday is that the threshold is pretty low for people to start getting nervous again about europe because we dont have the depth of confidence that the European Central bank is really all in and means the same thing that it means over here with the fed, so i do think theres a possibility for a surprise there because its really been off the front pages for a while. I mean, im mostly concerned when it comes to our markets about, again, as was mentioned, the bullish sentiment welled up here a little bit. Even when you consider that from the september and october highs, the market is only up 3 , 3. 5 . Seems like new fiveyear highs are plowing new ground but in reality just had a dip into year end and a rebound so i feel like weve gotten a little overexcited and that being the case, where you dont see any correction being too serious, therefore, why worry about it and stop buying and until that stops i guess were in for this kind of market where it wants to try to go higher, even if its overbought and people are excited about it. Wheres the leadership, technologi technologies . Where do you see conviction on the bye side, john . Continue to see the Home Builders financials both lead the market as well as leisure and Asset Management, leisure because of pentup demand and everybody paying down debt for the last five years and stocks like carnivale and cruise liners printed very nicely today so those types of leisure stocks are doing quite well. Asset management again, the legg mason movers and more and more interest in Asset Management in general. Morgan stanley, jeffries, those stocks making new highs and bank of america looks like its breaking out again and should challenge 12 and china was in a bull market the last time i looked so i dont know why he said china is not Getting Better. Its not. Whats the problem with china, david . I think if you look at the companies that are supplying to china, commodity prices, again, yums earnings just very recently, the growth rate is 5 to 6 , not the 8 to 9 , so relative to consensus i think china is a bit slower than what wall street is expecting today when you look at the pipeline of companies that are supplying to china. That doesnt deter the Economic Outlook globally or for the stock market in the u. S. But its a bit of yellow flag out there to investor and look what happens to their stock returns, mediocre compared to domestic returns here. Whats the most damaging implication for the u. S. , companies deriving revenue to a significant amount like yum brands is because of the slow down due to the china slow down . I think moderation, and the good news here in the u. S. And midwest, a rebirth in manufacturing. I think bodes well for the u. S. And bodes well for many stocks in those industries. How, do you go ahead. A poultry specific issue for china. The car sales in china is supposed to be off the chart so i think its Getting Better, a and the stock market is it telling us that. Other companies are starting to bring their manufacturing to the United States because the natural gas price is so low over here. Yeah. They are also going to mexico. Ed, jump in here. How do you invest it . Well, ill tell youing everything that they are saying i agree w. China obviously got hurt a little bit. Their growth slowed down but the rest of the world looks good, and my biggest fear is one of them is europe. Kind of quiet and the printing of money has put a bandaid and i think well see something thee unsettling to our markets. Additionally down the road be ready for problems in japan. Currency being devalued and right now were in a good position with stocks. To me the most risky investments out there today are the ones with bonds. Maturities of bonds in california, 20 years out, 15 years out, and the price is 11 so if they do a yieldtomaturity, maria, looking at 1 , 2 gain over the next, you know, 10, 15 gain. Interest rate sensitive bonds are my biggest concern in the investment world right now. Well leave it there. Gentlemen, great conversation. Appreciate your time. Thank you so much. Chipotle out with earnings. Josh lipton has the numbers. Josh . Josh . All right. He doesnt have his ear piece n. There you can. Hello, josh. Yar. Were looking through chiplys earnings report. Right now investors are pay applauding that report. The Company Reports eps of 1. 59. They told us preliminary result would be between 191, 192. Comp, samestore sales up 3. 8 and that obviously previously announced. As you can see, investors are applauding this report and looking at a stock moving 3. 3 after hours, and well keep you updated as we sift through that report. Thanks so much. Were minutes away from disneys earnings release. Always a great proxy for the overall economy. Find out how the dow and your investments will be impact the by that release and after the numbers we eke talk. Plus, president obama is asking congress to come up and new tax revenues in order to help the deficit. Well have a conversation with represent dave camp coming up later in the program. Stay with us. M charles schwab. Tdd 18003452550 gives me tools that help me find opportunities more easily. Tdd 18003452550 i can even access it from the cloud and trade on any computer. Tdd 18003452550 and with schwab mobile, tdd 18003452550 i can focus on trading anyplace, anytime. 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[ male announcer ] with citibanks popmoney, dan can easily send money by email right from his citibank account. Nice job ben. [ male announcer ] next up, the gutters. Citibank popmoney. Easier banking. Standard at citibank. Welcome back. The market in a tripledigit move today, finishing up about 99 points at close at the about 13,979. What is fouling this rally . Our jeff cox joins us and says that these are his words, its dumb money and the gains wont last. Bob pisani taking exception with that. Both are with us to hash it all out. Jeff, what do you mean by dumb money i . Also take exception with that. I think i dont know what youre talking about. Its a little coarse. Look at the money coming into the market now. Its late money. The big selling point for this real has been this fun flows metric. I did szott some tracing back. I went back to 2007. In fact, 2008 was the only year, the only january that we have not seen a big in flow into funds so you cant tell a whole lot about that. You look at what the insiders are doing. Thats what im doing right now. The corporations have stopped buying. The unsiders are selling, so this is telling you that this rally is getting very tired, and i do believe this dash for trash that i call it, the big stocks, the big metrix doing well, stocks with a lot of Short Interest and zero dividend payers. They have led the rally. Sorry to use the word dumb money but it doesnt look smart to me right now. A dumb idea to put money to work in this market . The corporate insiders, they are sellers. Buybacks are down because, number one, prices are high, so it makes sense to pull back on the buybacks. They have options. Dont have to boy, the corporations and remember what happened at the end of the Fourth Quarter in 2012. The deal with Capital Gains and other issues associated with the fiscal cliff so its noimt probable. Let me answer your question. It is far too early to talk about the Retail Investor getting back into the market. This is a tryingle of whats going in compared to the 400 billion that went out. Not 199. All these people still very afraid of the stock market. Im with you, maria. I take exception to calling it dumb money. The only network that calls its viewers by calling them dumb money. I can understand its a dumb idea but to call anybodys money dumb is dumb. Disney numbers are out and julia has the numbers. Julia . Reporter thanks so much, maria. Revenues coming in at 11. 13 billion, up more than 5 . Wall street was expecting 4 growth. Diluted earnings per share for the quarter was 77 cents, but excluding certain items, there are a couple of charges and a couple of sales, onetime sales. The apples to apples number was 79 cents. Thats down just one cent from a year ago quarter. Wall street was looking for a decline of 5 in eps and looking for 16 cents per share, so that is better than expected, maria. Breaking down the different divisions, Media Networks, parks and resorts and Consumer Products all showed 7 Revenue Growth whereas the Studio Entertainment Division saw a 5 decline in revenue and a 43 decline in operating income due to tough comparisons in the year ago quarter. Right now well bring in disney ceo bob iger. Thanks so much for joining us today. Pleasure, julia. How are you . Good. You have better than expected results at the Media Networks even though your programming cost, especially for espn, continue to rise. Whats driving the surprise on the upside and the down side. The fundamentals of our underlying businesses were relatively god for the quarter. A lot of difficult comparisons on the studio side which you cited. Two big titles in the home video market in lion king and cars. A big swing factor. Park and resorts, a shift of vacationing around the Holiday Season into the quarter were currently in. People vacationed later and our core ended on december 29th and this year december 31th. We have new distribution deals coming online, but the revenue for those deals or the increased revenue wont hit until the Second Quarter so a lot of ins and outs and basically the trends were good. Very strong results at our domestic parks. The bookings have been pretty solid and advertising was okay and generally speaking our businesses performed well and our Interactive Media group was profitable for the quarter, the first time the group has been profitable since weve been breaking it out. Bob, let me follow up on the affiliate deals and the new sports deals because it feels like the analyst community, wall street, is trying to get their arms around all the moving parts here and even though its clear that youll make more money on new deals they are struggling with margins. Can you tell us what that means in terms of margins Going Forward in terms of new deals in sports . Well, espn will continue to grow at a nice pace. Were going to have a few specifics on our call coming up, but our anticipation is that espn will deliver solid high to single digit growth for the year. There were new deals that kicked in, notably with the number of College Football conferences or College Sports conferences for College Football, and the increase in rights fees hit us mostly in the quarter. If you look at the year, the costs for espns programming will start to flatten out. We also have some distribution deals whose increases dont kick in al after the first quarter. If you look at espns performance for the year, or if you anticipate, it youll see that well deliver a pretty strong result for espn, so it was mostly a function of the quarter and the timing of these deals you say that the programming costs are going to start to flatten out, but espn for the year. But essence is the most expensive cable network. How much more can you continue to raise prices . Weve done a number of longterm deals with distributor, and i think representing over 60 , 65 of the country so theres a few deals to go. The price increases that we have for espn are primarily increases that we believe reflect the continued Value Proposition for espn and for the distributor and the advertiser. If you lock at ratings, for instance, look at a number of hours of Live Programming and look at strength of the brand and the multiplatform play where can you watch espn just about anywhere. You see a business from a consumer perspective and from the distributor perspective thats very attractive, so well be able to continue to raise espns rates. We dont do so in any cavalier fashion. Weve been investigating in its programming and production and believe that the Value Proposition is still there, strongly. Bob, what about some of the deals that youve been doing, so aggressive over the year whether its pixar and marvel and lucas just closed. Will the growth come from even further deals down the road, or are you expecting that youve sort of federal the holes that you warranted to show in terms of deals . We had three great opportunities with pixar and marvel and now with lieu sass film and star wars. We looked at each differently and different opportunities and in all cases we thought we would use the imlage to grow the company and marvel and pixel were acetive, around the time we maude the deals, we thought the lukas Film Acquisition will be a cretive in 2015 which happens to be the year we release star wars 7. In all cases they accept whats core to disney, high quality branded entertainment and we thought those were great opportunities in businesses that were very much akin or similar to the businesses that disney has run all these years and has run well. They really are special deals. Isnt another star wars out there. Bebelieve they are special deals. Marvel and pixar certainly over time have proven that they were special on a number of different directions, personal in enhancing brand value and we believe lukas film and stars stars will do the same thing. What about on the distribution side of it, bob, because the netflix deal is so interesting . Can you give us the big picture. Interestingly bypassing the traditional contact distributor for netflix, was it a strategic deal or a financial deal . Were they just the highest bidder . Yes, they were. It was mostly a financial play. They made an offer to us we couldnt refuse and looked at it from a strategy perspective and mostly when we look at a deal like that, there are more and more opportunities for intellectual property owners, particularly when they are good brands to distribute their product on new platforms and new ways, thanks to new technology and netflix represented one glaring example of that, but they also stepped up and made us the right offer. On the one hand its an example of the strategy we used many years back to use technology and make the product more compelling and accessible. On the other hand, it speaks to the strengths of our intellectual property. The strength of that international celebrity, you brought in j. J. Abrams and what else do you have in the works to make more investment . Grade to put that in j. J. Abrams hands. He created alias and lost which were both big hits on abc. Ask the star wars 7 is important to us and millions and millions of fans around the world, and thats been put in the hands of a great filmmaker, with a writer who has who have had with us inticsary and writing and putting together, and theres been speculation about some standalone films that are in development, and i can confirm to you today that in fact we are working on a few stand alone films. Larry sakden and simon binberg are working on films derived from great star wars characters that are not part of the overall saga, so we still plan to make star wars 7, 8 and 9 starting in 2014. Big news for star wars fans and also investors . A bit of fair news. A bit of speculation out there, and i thought wed take the opportunity today here on cnbc, as a matter of fact, to confirm that. Thank you. Real quick on the parks business, can you give us your insights in terms of what youre expecting from the parks business in an economy that, of course, we ton to debate on its its growth and getting back to real sustained growth. What are you seeing in the parks business . Some softness in the quarter internationally, but the domestic parks, notably california, disneyland, disneylands california adventure and oernldo, Wonderful World of disney, so many disney things in my head. Love it. Disney world had a very Strong Quarter and the trends for the year are quite good. Bookings are strong and pricing is strong. Our cruise ships are 80 booked for the year and thats with 16 more inventory, and thats running above the number of state rooms or cruise nights that we had booked the same time last year, so as we look into the year, our park business seems to be performing well. Some of that is the result of some recent investments, notably the new ships but also what we did at california adventure led byland have paid off and the results have been sensational. Can you tell us what implications might be for Consumer Products . Ill start with star wars fans because were here to service our fans, too, will be great because there will be more star wars basically released in the atmosphere, so to speak, and thats new and fresh, but im going to leave it to kathy and the lukas team to provide all the details when ready. I mentioned the two creators involved in Simon Kinberg and larry dadsen. They are both working with j. J. In consultants on star wars 7 and in larrys case he wrote the Empire Strikes back and return of the jedi and has a great pedigree with lukas. Sounds like a great move in order to make the best investment opportunity. We have opportunity and good ideas out there and creators who are really interested in flushing out those ideas. Seems like a good note to end on. Maria, back over to you. Good to have you. Thank you, julia, as well. Sikha out with, as well. Numbers out. Back with you in a movement and use fidelitys analytics to spot trends, gain insights, and figure out what you want to do next. All in one place. Im Meredith Stoddard and i helped create the fidelity guided portfolio summary. Its one more innovative reason serious investors are choosing fidelity. Now get 200 free trades when you open an account. With multiple lacerations to the wing and a fractured beak. Surgery was successful, but he will be in a cast until it is fully healed, possibly several months. So, if the duck isnt able to work, how will he pay for his Living Expenses . Aflac. Like his rent and car payments . Aflac. What about gas and groceries . Aflac. Cell phone . Aflac, but i doubt hell be using his phone for quite a while cause like i said, he has a fractured beak. [ male announcer ] send the aflac duck a getwell card at getwellduck. Com. Welcome back. More earnings out. Zynga out with numbers. Over to josh lipton at the earnings desk. Were looking at zingsa which is up big. Posting a surprise profit on an adjusted basis. Revenues that Beat Estimates and ref up as well. Total expenses dropping to 273 million and the Company Expects an adjusted pershare loss of four cents to five cents on bookings and they have will be looking for a loss of a penny and investors like the look of this report. Zynga up big years after hours. Maria, back to you. All right. Josh. Thank you so much. Back now with jeff cox and bob pisani with more on the dumb money versus the smart money and the role this real. Bob, you and i both had a problem with the term dumb money, but i guess, jeff what, youre saying is it a dumb idea to put money to work now after this huge runup and it seems like it because youre looking at corporate insiders which are selling. Well, maria, if i offended anybody with the dumb money tomorrow, but lets leave it out there and call it a little bit of tough love. One of the points that i make in my cnbc. Com post is that j. C. Penney shares are 47 sold short and the stock it up over 25 in the last three weeks, and if you want to talk about dumb money, how about 3 trillion worth of dumb money thats using to prop up the stock market right now. I just want to tell investors if you want to be smart, go up the quality ladder. Watch out for this stuff. Jeff, i think its the fed thats helping to prop up the markets more than anything and on the question of the dumb money. Not 1999. Then Retail Investors sentiment was at a bullish extreme. They have been bearish for four years now. A small group of investors apparently had starting to put money back. The intel reports the investor intel Market Sentiment is at a market peak, 30 difference between bulls and bears now. Ves very high. Not sentiment. What the Retail Investors are doing. Wheres the flood of money, 20 billion this month. Scott, scott, what you talk about dumb stuff. The valuations are pretty low. Youre not talking about the same market that we were talking about in the 90s when valuations were off the charts. Thats right. It was 25 back in 99. 15, 14. 13. 5, 14 right now. Trailing and forward is above 15. Still, talking about great numbers. And i would dispute what that e part of the pe is as far as forward earnings. We saw what happened in the Fourth Quarter. Originally expecting doubledigit earnings increases, 11 . You and i talked a couple months ago, down there at the exchange about what the original projections were. If the market had to meet original numbers for the Fourth Quarter, we would be talking about a recession now. Yeah. Its always true, jeff. Forward numbers are always, always bullish. We play the same game every quarter, absolutely. At least were comparing apples to apples in 2008 and 2004. Using forward numbers, we know they are always a little bullish. All right. Guys, thank you. Well keep watching the money. Well see you soon. Jeff cox and bob pinsy. A big year for the market in 2012, but was it a big year for charitable given . Robert frank is up with the numbers next and the market could take a big hit depending on what washington hammers out on revenues and spending cuts. Congressman david camp is here to tell us what will likely happen. Welcome back. The Market Making a big comeback today in what has been a wild february so far. Josh lipton with the details. Over to you, josh. Maria, the month of february has kicked off with some wild swings in the stock market. Only three days in, and we have had tripledigit swings on the dow each day, up 149 points and down 129 points and up again today, though closing up just 99 points. February, by the way, had one day with a tripledigit move on the dow. Some technicians do say this kind of volatility could signal a passable correction. Lets walk through the sessions. On friday three dow stocks reported earnings, but it was Economic Data that really drove the markets higher. The dow closed above 14,000 for the First Time Since 2007. Monday all three major indices fell and investors were focused on europe, allegations of corruption in spain and election uncertainty in italy sparking a selloff. Today though bulls back in charge. Though it would have been more important for technicians if the market had closed above 14,020, fridays intraday high. Dow transports, however, did hit a new alltime high. Maria, back to you. All right, josh. Thank you so much. Fears of a looming tax increase taking a toll on Charitable Giving. Robert frank breaks down the numbers. Total Charitable Giving last year increases only 2 . Thats half the growth rate in 2011, and the slowest growth since 2009 when the crisis hit. Now nonprofit experts say tax hikes were partly to blame for the low giving. The wealthy last year knowing their taxes would go up and giving less as a result, but there were other factors like the lack of major disasters last year. In 2010 and 2011 we had the beginning for the earthquake in haiti and japan and last year we did have sandy, but that had less of an impact on giving. There were a couple of bright spots last year. Online giving and small nonprofits. Online giving was up 11 last year to around 25 billion and small charities, those with less than 1 million in donations, those grew 7 . The biggest charities, they grew less than half a percent. Now, the charities that got the most money were faithbased groups and educationch the biggest losers last year were International Relief groups and health care. You can read more on the giving in 2010 on cnbc. Coms inside wealth. Back to you, maria. Thank you so much, josh. The dow industrials rallying back after mondays selloff. Can it carry over into tomorrow . Three of wall streets top strategists weigh in and pope maes plan to delay massive spending cuts. Republican house ways and Means Committee chairman dave camp is with me next. [ indistinct shouting ] [ male announcer ] time and sales data. Splitsecond stats. [ indistinct shouting ] its so close to the options floor. [ indistinct shouting, bell dinging ]. Youll bust your brain box. All on thinkorswim from td ameritrade. Welcome back. President obama proposing his plan to head off looming acrosstheboard spending cuts. John harwooded a the white house right now with the details. John . Reporter it wasnt a specific plan but a request for congress to come up with a plan, a shortterm plan to put off the acrosstheboard indiscriminate budget cuts we call the sequester which is established under law. It was put off for two months in january to give the Congress Time to come up with a budget. They havent done so yet. Both parties in both chambers are working on that, and president obama said if they cant come up with a comprehensive longterm plan over the next several weeks before the sequester takes effect on march 1st they should at least get something smaller. Heres the president at the white house today. Congress is already working towards a budget that would permanently replace the sequester. At the very least we should give them the chance to come up with this budget instead of making indiscriminate cuts now that will cost us jobs and significantly slow down our recovery. Now, of course, the biggest Sticking Point in trying to come up with this package, short term or long term, is whether it includes just spending cuts as republicans insist or includes tax revenues as well as spending cuts as the president repeated today hes in favor of, and, of course, the top item he cited in terms of tax loopholes to close is the carried interest loophole benefiting private exity executives and Hedge Fund Managers and well see if he can make that stick and get revenue as part of this new deal. The chairman of the house ways and Means Committee dave camp is not impressed and says its nothing more than another tax increase to pay for more washington spending. Chairman camp joins us now to make the case. Mr. Chairman, good to have you on the program. Hi, maria, good to be with you. You say the president s plan is not what America Needs right now. Whats a better way to reduce the deficit . Progrowth policies and i think we can do that through comprehensive tax return where we can lower rates, broaden the base and have a less complicated tax code and independent experts show if we can do that with spending cuts, we can create 1 million jobs in the first year. Well, it just seems like we keep kicking the can down the road, delaying, delaying, delaying. The cbo says the automatic budget cuts would cut our gdp in half. Given that, does it make you more inclined to sign on to the president s plan . Look, House Republicans passed last august a plan to change the mix of those spending cuts in the first year, and thats still out there, but what the president did, hes got his revenue at beginning of the year. More revenue will just hurt the economy. It will cost us jobs, so what we really need now is the second piece of the balanced approach the president called for in december which is the beginning of reining in our debt and deficits. Again, on the president s commission, said that when the debt gets to this level of the economy, it, again, costs us millions of jobs. The debt now is more than our entire gdp so we do need to look at the spending side of it. We also need to combine that with comprehensive tax reform that will grow our economy and get the economy moving again. Its not doing well enough. I mean, if this is so obvious, how come its not happening . I mean, why is it that we still dont have real spending cut proposals to actually get us a realistic handle on the debt and deficits . Well, we do have a proposal out there, and in the first year its called the sequester, and i think until look, the president hasnt submitted his budget. It was due by law on monday. He needs to do that. He hasnt done that. Were going to our budgets are due in a few weeks. We will produce those, but in the meantime, i think we have to move forward on bringing spending cuts forward. The president did not do that in the campaign. He didnt do it at the end of the year. Hes received 600 billion in revenue and now we need to move towards the spending side in connection with tax reform. Its a combination of those two things. Okay. So what do you think is holding back the president from producing this budget . I mean, if i mean, Everybody Knows what the drivers are for the debt, the 16. 4 trillion and the more than trillion dollar deficits every year. Whats the problem in terms of getting the budget out . Look, he seems to just want more revenue. He seems to be fixated on that, and and made that a condition of our entire tax policy at the end of the year, and he did get that, but we did get permanent tax policy that helps us in the midtime right now, but we need to move forward on a comprehensive plan to lower rates. That will help grow our economy and bring revenue to the government that could solve two things, one, help with our debt and in addition get people to work again. I think thats where we need to go. The president keeps saying a balanced approach, even though we all know that taxes were increased at the beginning of the year. As part of your efforts to overhaul the tax code, which everybody agrees needs to happen, youre proposing revamping rules which govern derivatives, which would raise taxes for the countrys largest banks. Now there are critics to that plan. They say its political payback for ceos who backed the president s push for higher taxes. Whats your response . Well, theres a no bank tax at all in this, none at all. Were trying to have a uniform set of rules so wall street understands what the rules are and we can have transparency in terms of whats going on. Theres no bank tax or transfer tax in that at all. Its really will uniformity in a complex area. You know, weve been playing whack a mole. As we find a tax policy theres a new Financial Product out there. This makes it much more uniform, and i think a much better policy. Overall i expect tax reform to be revenue neutral. This will not be a revenueraising tax reform plan. Overall its going to be revenue neutral. So if theres no bank tax, are there fees that, you know, are being mistaken as a tax . I mean, is this going to cost the banks more money . Were going to move to a marktomarket valuation at the end of the year. Some Financial Products do not have that valuation now. Were going to bring them in to a more standardized tax policy, and so as a result that does raise some revenue, but overall tax reform is going to be revenue neutral. So tell me how you see this playing out in terms of the sequester Going Forward. Do you think that i mean, is it a better idea to just have these automatic spending cuts where when you look at defense we dont know what missions are being compromises. We dont know, you know, where the cuts are going to hit in terms of our defense as a country. I mean, is that really the way to do it . No, i dont like the automatic approach, but months ago we have proposed a way to reorder those so we dont have automatic spending cuts, that in the first year we have a more balanced approach in terms of defense versus other spending. The president basically has ignored that. He has not come forward with an alternative on that, so at this point its really up to the administration to do that. We have done that. Those views are out there, and they have been ignored, so i think at this point we need the president s budget. Well move forward on ours which will take into account a revenue level at a lower amount. Are you are you going to get it . Mean what, happens if you get rolled over again . Look, i think we have to make a stand here that revenue is not going to solve our problem. The president wants more money so he can increase washington spending. Weve given him more revenue just a short time ago. We now need to look on the spending side. What can we do in terms of the longterm drivers of our debt to rein those in so we can have those programs sustainable . Look, 60 of the budget is is amounts we dont vote on. We need to hear from the president some ideas on how we can make those programs sustainable for the long term. And you think well hear that . We heard from the president today. We did and it was disappointing that he focused again just on revenue. Look, theres never going to be enough revenue unless we combine some combined spending reductions with comprehensive progrowth tax reform. Sure. If we do those two things, then we can get our economy back on track and address the debt and deficit problems. Well all be watching. Appreciate your time today. Thanks, maria. David camp, representative from michigan. Lets send it over to josh lipton. Watching shares of hewlettpackard ripping higher after hours. Heres the news. Quarts, the business arm of the atlantic is reporting that the hewlettpackard board is studying a breakup of the u. S. Tech company. Important to note here, the hp board has not formed a committee to evaluate the breakup and has no plans to do also important to note that cnbc has previously reported that hp actually had no plans to sell core as sets but investors obviously reacting to this headline. Hp up big in the afterhours. Maria . Back to you. Thank you, josh. Well follow that one. Earnings taking center stage tomorrow. Will the numbers fuel the next leg of the rally . Our trio of top strategists will weigh in. Sta stay with us. Like Northern Trust by your side makes all the difference. We add precision to your portfolio construction by directly matching your assets and your risk preferences against your own unique life goals. We call it goals driven investing. After all, you dont climb a mountain just to sit at the top. You look around for other mountains to climb. Expertise matters. Find it at Northern Trust. [ male announcer ] when we built the cadillac ats from the ground up to be the worlds best sport sedan. People noticed. The allnew cadillac ats 2013 north american car of the year. For a limited time, take advantage of this exceptional offer on the allnew cadillac ats. Welcome back. 30 seconds on the clock for each of our next guests, telling us what to be prepared for tomorrow. Good to see you guys. Stuart, youre up. 30 seconds on the clock. Chance tomorrow . Okay, well, tomorrow, not a lot of data. Going to be quiet. Mortgage application data. Last number was down a little bit, but the Housing Market looks good. Its going to be a driver for the economy Going Forward. Now, the next day will have a lot more. Initial claims coming in, be a little bitteetter. A number of reports going to be better. Were not really concerned about what were seeing in the s p bouncing around 1500. More volatility in the last couple of days but not meaningful. All right, thank you so much. Wayne, youre up. 30 seconds on the clock. What do you want to watch for tomorrow . Were watching where the markets trading relative to the 200day moving average. Weir 7. 5 above that average and what weve noticed is, when you get 10 above, bad news starts to surface. We have 2. 5 to go in the rally and at that point, we would want investors to be a little bit more cautious. So, thats what were watching tomorrow. So, taking money out of this market then . We will be very cautious after about 1525, 1530. All right, frank, youre up. Were going to be watching washington. It seems that every time our political leaders are out there talking about the economy, they some how find a way to bring the market down. Going to see if they can do that again this time, be a catalyst for a muchneeded pullback in this market. Many of the individual investors we deal with believe these politically induced pullbacks are buying opportunities rather than a reason to panic. Gentlemen, thank you very much. Appreciate your time. See you soon. Watching those events tomorrow, guys, thank you. Up next, my observation on how all the uncertainty around our debt problems could impact the market. Stay with us. Verify and lock. Command is locked. Five seconds. Three, two, one. Standing by for capture. The most Innovative Software on the planet. Dragon is captured. Is connecting todays leading companies to places beyond it. Siemens. Answers. [ male announcer ] ive seen incredible things. Otherworldly things. But there are some things ive never seen before. This ge jet engine can understand 5,000 data samples per second. Which is good for business. Because planes use less fuel, spend less time on the ground and more time in the air. Suddenly, faraway places dont seem so. Far away. Suddinvestor. Yeah,laces donibut im a busy guy. Or it used to be easier but now there are more choices than ever. I want to know exactly what i am investing in. I want to know exactly how much im paying. I want to use the same stuff the big guys use. Find out why nine out of ten large professional investors choose ishares for their etfs. Ishares by blackrock. Call 1800ishares for a prospectus which includes investment objectives, risks, charges and expenses. Read and consider it carefully before investing. Risk includes possible loss of principal. And finally today, my observation on the upcoming budget, debt and deficits. The market hates uncertainty, of course, and of course, moving from one cliff to another is not the way an economy should operate. But after facing off on spending and taxes at the end of last year, nothing at all was done to reign in the countrys 16. 5 trillion debt. So, what is the alternative then . Today, president obama